LITTLE ROCK, Ark., Feb. 26, 2001 (PRIMEZONE) -- On Feb. 3, 2001, the Law Firm of Cauley Geller Bowman & Coates, LLP filed a class action lawsuit on behalf of all persons who acquired Critical Path, Inc (Nasdaq:CPTH) ("Critical Path" or the "Company") securities between Nov. 2, 2000, and Feb. 1, 2001, inclusive (the "Class Period"). Today the firm announced it is currently investigating potential securities law violations which occurred prior to Nov. 2, 2000, and, if appropriate, intends to file an amended complaint expanding the class period to include all persons who acquired Critical Path shares between June 15, 1999 and Feb. 1, 2001 (the "expanded Class Period").
The complaint charges Critical Path and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Critical Path provides e-mail-hosting services to a variety of organizations, including Internet service providers, Web-hosting companies, Web portals, and corporations. The complaint alleges that many of these types of companies were new and were suffering from a downturn in Internet-related funding, which began in the spring of 2000. By September 2000 at the latest, the problems many of these companies were having raising money had reached crisis levels. Defendants had also known for months that new accounting regulations would negate the Company's ability to continue to recognize up-front license fees in Q4 2000. The complaint alleges that Defendants knew this would severely impair Critical Path's future revenue growth and impair their ability to make future stock sales and extract future bonuses, which were tied to the Company's performance. Thus, according to the complaint, defendants continued to make positive but false statements about Critical Path's business and future revenues during Q4 2000. As a result, Critical Path's stock traded as high as $48.
On Jan. 18, 2001, after the market closed, Critical Path announced that in the fourth quarter 2000 it would report a multi-million-dollar loss. This was directly contrary to what Critical Path's CEO had told shareholders and analysts just weeks before. Then, on Feb. 2, 2001, Critical Path announced that the Company's results reported on Jan. 18, 2001, were materially misstated. This disclosure shocked the market, causing Critical Path's stock to decline to less than $4 per share in pre-market trading.
Cauley Geller Bowman & Coates, LLP has substantial experience representing investors in securities fraud class action lawsuits such as this. The firm has offices in Florida, Arkansas and California, but represents shareholders from throughout the nation. If you have any questions about how you may be able to recover for your losses, or if you would like to consider serving as one of the lead plaintiffs in this lawsuit, you must meet certain requirements and take appropriate action by April 3, 2001. You are encouraged to call or e-mail the Firm or visit the Firm's website at www.classlawyer.com.
CAULEY GELLER BOWMAN & COATES, LLP Client Relations Department: Sue Null, Charlie Gastineau or Jackie Addison P.O. Box 25438 Little Rock, AR 72221-5438Toll Free: 1-888-551-9944 E-mail: info@classlawyer.com
More information on this and other class actions can be found at www.primezone.com/ca